Ranbaxy agrees to release reports to prosecutors

Indian pharmaceutical giant Ranbaxy Laboratories today said it would release internal reports sought by federal prosecutors in Maryland, who are investigating allegations the company knowingly produced and sold generic medicines in the United States that did not meet quality standards.

In court papers filed this afternoon, Ranbaxy said it had agreed to release the internal audit reports before the government filed a July 3 motion asking a judge to compel the company to turn them over.

The motion, first reported Saturday by The Star-Ledger, sent Ranbaxy's shares tumbling 10 percent today in trading on India's stock market. Shares of the company, which has its U.S. headquarters in Plainsboro, closed at their lowest level in eight years.

In separate statements, Ranbaxy and the Japanese drugmaker Daiichi Sankyo -- which announced plans in June to acquire a majority stake in the Indian drugmaker -- said the Justice Department probe would not derail the merger.

Ranbaxy had global sales of $1.5 billion last year, including $390 million in the United States.

For the past two years, prosecutors have subpoenaed thousands of documents from Ranbaxy to investigate a ''pattern of systemic fraudulent conduct,'' including fabricated test data at a plant in northern India and attempts to conceal the ruse from Food and Drug Administration inspectors, the government said in court papers filed in Maryland.

In recent months, the government and Ranbaxy have sparred behind the scenes over a subpoena for internal audits by Ranbaxy's contractor, Parexel.

Ranbaxy's response to the motion said "the requested documentation will demonstrate that no data manipulation, fraud, or dishonesty occurred" in its FDA filings.

The drugmaker also complained federal prosecutors have not disclosed the full extent of the government's probe.

"The government has chosen not to share such information yet. . . If and when the government chooses to share the details of its concerns, Ranbaxy commits to responsibly respond to, and resolve, those concerns," the company's filing said.